There are many good reasons to use an accountant to help with the smooth running of a limited company, particularly when it comes to submitting annual accounts and managing tax affairs. However, there is no need to use an accountant to set up a limited company, even though they will generally offer this service.
Instead, a company formation agent can set up a limited company and get it registered with Companies House for a fraction of the cost, in a shorter timeframe.
5 reasons to use a company formation agent to set up a limited company
There are various factors to consider when deciding whether to use an accountant or a company formation agent to set up a company, including:
1. Expertise: Whilst many accountants will offer to form a company as part of their wider service, this is generally not part of their core expertise.
Company formation agents specialise in setting up limited companies and can therefore offer niche advice, from choosing the correct company structure to providing tips on choosing a company name.
2. Cost: Accountants will often charge several hundred pounds to form a company (normally £200-£300).
Company formation agents charge a fraction of that cost – as little as £12.99 with Rapid Formations. In fact, accountants widely use company formation agents when they set up a limited company on behalf of a client.
3. Company Manager Portal: Company formation agents will often provide a free company management portal, which enables clients to maintain, develop, and oversee their companies online. The portal provided by Rapid Formations also allows clients to check on the progress of their company registration as it goes through the approval process.
Meanwhile, accountants will not generally provide direct access to this type of client portal, and it will often be necessary to ask them to update company information, which can lead to delays and unnecessary cost.
4. Registered office address: Many accountants who register companies for their clients will want the registered office to be at their office location. This can lead to a lack of independence and loss of control for company owners. For example, company owners will, for the most part, not receive copies of important government mail, instead having to rely on a third party to deal with matters they are not aware of.
For example, Rapid Formations provides a digital mailroom, which ensures that all statutory mail is scanned and emailed to customers on the day that it’s delivered. A copy of all items of mail is also available via our online company manager portal, allowing clients to access their mail at anytime, from anywhere.
5. Speed: Company formation agents who are authorised by Companies House have access to software capable of submitting electronic incorporations. This means that the formation process often takes a matter of hours (usually 3 to 6 working hours with Rapid Formations).
Accountants will often be juggling various other tasks, and it will therefore generally take longer to get a company registered via an accountant.
Typically, using a company formation agent to set up a limited company is faster, cheaper, and provides more control over company registration issues compared to using an accountant.